Digital Transformation – A 90s Trend that is NOW
It would be a massive understatement to say that 2020 was something special. But not all was bad, the year was a huge success story for going digital across the globe. With the COVID-19 pandemic still sweeping the world and forcing everyone into a new stay-at-home era. Both businesses and customers must face a new reality, everyone finally took digital transformation efforts seriously and began rapid implementation. It is no longer something ambitious CMOs put on their roadmap and never get to…
So, welcome to 2021, where we take stock of the years past and give our own fresh take on the topic of digitalization. My name is Alexander, and I’ll guide you through-out the next few months on topics like: developing your WebApp and how it can benefit your business; What is and why is everyone interested in making their own CMS/CRM/ERP; and Cyber-Security with developing overseas. This and everything in between with yours truly. But first.
A drive down memory lane
The year is 1994. Bill Clinton and Boris Yeltsin sign the Kremlin accords. Ace of Spades – “Signs” is topping the charts. And “Netscape Navigator 1.0” becomes available for free and quickly sets in as the market leader and de facto internet browser.
As this goes on, a single entrepreneur is about to create a company that will eventually make him the richest person in 2020.
Jeff Bezos lays the groundwork for “Cadabra” in his garage, North-east 28th in Bellevue Washington. Couple of months later it becomes known as Amazon due to an amusing interaction with a lawyer mis-hearing it as “cadaver”. A year later it went digital, and within 2 months they were selling in all 50 states, with sales of 20k/month.
By reading a report detailing the future of web-commerce and its projection of 2.300% growth, he devised a list of 20 most marketable products, eventually narrowing it down to 5: compact discs, computer hardware, computer software, videos, and books. After analysing the worldwide demand, cost per unit and resource chain availability (i.e titles) he chose books, and the rest is history..
Same year, Pizza Hut breaks the news and goes digital with its experimental “PizzaNet”. Sometimes you really don’t want to use the phone, but you want Pizza. You want it now and you want it fast.
Open your computer, navigate to pizza.net, create an account, login, and select your pizza out of predefined selection… revolutionary I know. Not to mention fast. [NOT]
But it was ground breaking enough for the time, where by the end of 1995 there were only 2.738 websites in the whole world. Pizza Hut was able to immortalize itself as allegedly the first instance of e-commerce and an innovator not only in crust related break-throughs but software as well.
A pit-stop in 1997
Two brilliant minds saw a problem and decided to address it. The problem in question was availability (or lack thereof) of video rental places. Remember “Blockbuster”?
Instead of attempting to compete on the same market, by opening brick and mortar stores all over US; they embraced digital. We’re talking about…
Don’t recognize the logo? That’s because in 1997 up till 1999 they haven’t changed it yet to their famous red theme. And the two brilliant minds? Reed Hastings and Marc Randolph. Mr. Randolph was an admirer of the new and popular company Amazon, and wanted to perform the same trick. Both originally considered but ultimately rejected the shipping of VHS tapes.
Once they heard about the new DVD technology and after performing a test of concept, they decided to wage war on the $16 billion home video and sales-industry by creating a top-of-the-line website where users browse and select movies for rent or purchase. Netflix, would then post the DVD’s right to their door, in an envelope which had all the necessary information for easy mailing back.
Not the streaming giant we know right now, and that would come later, Netflix was so successful that their main competitor and an absolute giant at the time, Blockbuster, filed for bankruptcy in 2010.
The age of digital transformation has begun, you had to move with it, or be swept by the tide. Admittedly slow in some sense, but it’s no less different now in our time; as it was in 1997.
“Study the past if you would define the future.” – Confucius
All throughout the 1990s companies, slowly but surely, kept growing their investments into the digital market. Computers were becoming more relevant. The average American household with a personal computer, grew from 10% in 1990 to 35% in 1997. And then.
It was the end of the world, or some would like you to believe so. And for some even, it did feel like it. Y2K rolled around and with it the great Dot-com bubble collapse, the market was growing so fast, everyone was speculating and investing. That between the beginning of 2000 and end of 2002 the industry collectively lost around 5 trillion dollars in stocks.
This signalled the slowdown process and maturity of companies and their willingness to digitally transform their business. But progress waits for no-one.
Information goes digital
The history of spreadsheets goes hundreds of years back, in form of paper. Electronic spreadsheets existed all the way back in 1970 such as LANPAR or VisiCalc, but due to the cost and bulkiness of computers at the time, not many companies were ready to invest and replace their paper variants. That is to say; not before.
With continues improvements in Data Analysis and first steps into BigData, companies were moving increasingly more information into their servers, and clouds. And most of it was in form of spreadsheets.
Services like Amazon S3, Microsoft Azure and Oracle Cloud Storage and, companies like SmugMug, Dropbox and Pinterest, and many other variants were popping up like wildfire and gaining due recognition.
Informational data was growing fast, it was going digital and there was no turning back.
All this created paving stones for data convergence and development and later, moved us into the age of CMS (Content management systems).
Definition of Digital Transformation
Let’s go automatic, systematic…
A mere 1000 words into the article I get to the definition, you can tell I’m great at this. Hopefully, by now you understand that “Digital Transformation” is a difficult term to define. Truly it’s not even a definitive term you can throw around, it’s more of a common understanding of a process.
Essentially, it is a path an organization takes as they adopt new ways to do business based on technological advances. Fundamentally changing something using digital tools or adopting new innovative technology and/or cultural changes to improve or replace existing paradigms with new ones.
In order to “digitalize”, the companies we’ve touched upon, and some companies we are yet to mention had to go through a complex business analysis campaign. Market research; Assessing technological advancements, “Mapping the process” and coming up with “solution automation”, the list goes on.
Let’s explore a case study for a better understanding of the topic: I’ll take the taxi service industry. And a small company…
Igniting opportunity by setting the world in motion
Garret Camp, a successful entrepreneur, only a year ago sold his company “Stumble-Upon” for $75 million to eBay. Garret a 30 something “young and ready to mingle”, was as many people in San Francisco at the time, struggling with the notoriously sluggish taxi industry.
According to the HAAS act, the government has control of the number of taxi-cab drivers using something called “Taxi medallions”. Introduced in 1937 to guarantee stable pay and working conditions for taxi drivers after the great depression. Without going into detail, the city of San Francisco at the time capped the number of taxi medallions at roughly 1.500.
With the population of SF, hailing a cab in the outer neighbourhoods, near the ocean, outside the city… anywhere but Downtown, was an exercise in futility.
Camp saw a problem and an opportunity to digitally automate a solution.
Merely a few months ago he was watching “Casino Royale” and the thing that stuck to him the most was the scene where Mr.Bond is following Le Chiffre. The agent looks down at his phone and sees Monde moving on the map towards his destination.
Sounds so simple and basic right now, but back then nothing of the sort existed.
Uber was born. By taking advantage of technological advancements and increasing dependency on personal phones. Camp was able to combine these things and create the next big thing.
Not mentioning other nick-nacks like automated card payments, driver/user ratings, personalised work hours and AI-controlled prices which were able to compete, and outperform the system at the time.
This all allowed it to become the multi-billion enterprise we know today with representatives in over 65 countries to date.
The Now™ and the future
The current pandemic, while horrible, as any other driving factor in human history pushed us collectively towards advancements and adaptability.
Zoom, initially developed and released in 2012, saw a massive share increase during these times, for remote working, distance education and online social interactions. That is not to say the app wasn’t successful before, on the contrary. However, the pandemic really skyrocket-ed it placing it 5th most downloaded app in 2020.
Everyone from their children to grandparents is adapting to the new digital world. Heck, even we built a video-conferencing app.
And it’s not amiss to say that science fiction ideas of 2000’s are a far-off reality. It’s more important than ever to let go of outdated practices and move on with the time.
While it is as difficult as ever to predict the future, one thing is certain that Digital Transformation is “a must” in our day and age, terms like BigData and Process Automation must become the norm in all enterprises on all levels.
And that wraps up my introduction into the history of Business Digitalization.
We’ve only scratched the surface and later we’ll touch upon resource block-chains, CRMs and other juicy topics.
At this time there are tons of books written on the subject and this article merely summarizes its history a tad. Importantly, it allows the first step to dive deeper into the peculiarities and specifics of the topic.
I truly hope you’ve enjoyed this small lookback as much as I enjoyed writing it.
Leave us a like below or better yet, tell me in the comment section where were you during the Y2K craze? Or the Stock Market crash! I would love to hear your story and opinion on Digital Transformation!